PAMELA YIP: Picking tax preparer requires homework

Choosing a tax preparer is something you should do with care. After all, this person will prepare a document containing the most personal details of your financial life. What’s more, you will personally need to certify to the government that the document is accurate to the best of your knowledge.
You want a person who knows what he or she is doing.
Most preparers are professional and honest, but, like in any industry, there are bad apples. Time and time again, I get news releases that detail how the feds nailed a tax preparer for falsely claiming tax breaks and refunds for a client.
Here are tips on how to pick a tax preparer and protect yourself:
• Check the preparer’s experience: You want somebody who’s experienced, trained and is up to date on tax law changes and who can suggest tax-saving ideas for the current or future years.
“Taxpayers may want to ask if preparers are affiliated with a professional organization and attend continuing education classes,” the IRS said. “If your preparer is an enrolled agent, a certified public accountant or an attorney, they have passed a high-level test to earn their title. These are the only three types of tax professionals who can represent you before all offices of the IRS.”
• Does the preparer stand behind his or her work? Do they guarantee the accuracy of the tax return, and if you’re audited, will that person be around to assist you?
• Check the preparer’s history: Check if the preparer has a questionable history with the Better Business Bureau. Also, check for any disciplinary actions and licensure status through the state board of accountancy for certified public accountants; the state bar association for attorneys; and the IRS Office of Enrollment for enrolled agents.
• Ask early about the preparer’s service fees: Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers
• Protect your refund: Make sure any refund due is sent directly to you or deposited into an account in your name and not a preparer’s bank account.
• Provide all documents needed to prepare your return: Reputable preparers will request to see your records and receipts and will ask you questions to determine your total income and your qualifications for expenses, deductions and other items.
• Never sign a blank return, and avoid tax preparers who ask you to do so.
• Review the entire return before signing it: Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
Pamela Yip is a personal finance columnist for the Dallas Morning News.